Mortgage rates drop to 5.3%, biggest one-week decline since 2008

Mortgage rates in the U.S. posted the biggest one-week decline since 2008.

The average for a 30-year loan fell to 5.3%, the lowest in a month and down from 5.7% last week, Freddie Mac said in a statement Thursday.

Buyers are getting a slight reprieve from this year's massive rise in rates that has started to cool parts of the U.S. housing market. The jump in costs has pushed more buyers out of the real estate hunt, causing inventory to increase. Sellers have started to cut prices in certain areas.

“While the drop provides minor relief to buyers, the housing market will continue to normalize if homeprice growth materially slows due to the combination of low housing affordability and an expected economic slowdown,” said Sam Khater, Freddie Mac's chief economist.

Even as price gains start to decelerate slightly, the market is the least affordable it's been since the mid-1980s, according to mortgage data provider Black Knight.

At the current 30-year average, a borrower with a $300,000 mortgage would pay roughly $1,665 a month, about $383 more than at the end of last year, when rates hovered around 3.11%.

Home prices kept climbing in May, even as sales slowed. The national median home price jumped 14.8% in May from a year earlier to $407,600 — an all-time high according to NAR data going back to 1999.

Mortgage applications have declined 17% from last year and refinancings are down 78%, the Mortgage Bankers Association reported this week. Those numbers are unlikely to improve much with more Fed rate increases a near certainty.